Richard Tyndall The formidable result he got in Newcastle under Lyme, a Labour area, suggests Jenrick is no party hack!
I might not know Newark, but I most certainly know N-U-L given I lived for 8 years in the constituency when growing up in Clayton, and my parents live virtually on its doorstep, just in Stone territory by literally 200 yards or so.
N-U-L has been moving in the Conservative's favour for the past 20 years or so - favourable demographics, decline of heavy industry / mining in Chesterton / Silverdale, so Jenrick's good result there in GE2010 was hardly unexpected. Its a shame the boundary changes didn't go ahead in this parliament as the proposed N-U-L and Stone constituency would have been an absolute corker of a marginal.
So does anyone disagree that Labour have no chance ?
But what will the media narrative become ?
If it becomes "Labour need to win to show they're on course for government" then EdM's got problems.
It it becomes "Labour can't win but they're vote will collapse to let in UKIP" then EdM's got problems. Not specifically in Newark but generally if former Labour wwc voters get even further encouragement to vote UKIP.
I'm surprised Avery's apostrophe police hasn't spotted the error.
I was too fixated by the Nabavi being "elegant eloquently" rather than "elegantly eloquent" to notice, ar.
And TSE sinned on the their/there/they're decision last night. Too easy to do oneself to risk attack!
it takes gumption to keep trooping on and trying to pitch yourself as an informed political pundit when you've made so many spectacularly wrong predictions
Can you name some of the predictions that Hodges has made that have been spectacularly wrong? This is a genuine question. The fellow seems to take a lot of stick over predictions about events that haven't yet occurred.
Well there is this.
David Miliband has won, says Dan Hodges.
This Saturday David Miliband will become leader of the Labour party. He will have won a majority of his Parliamentary colleagues and the wider membership, along with sufficient support from unions and other affiliates to secure not just victory but an overwhelming mandate. The New Labour era will be over.
Oh, I don't count that - not so much a prediction, more an olive leaf to the Labour Left from the triumphant Blairites. (And also a case of drawing the wrong conclusion from your own correct analysis.)
So does anyone disagree that Labour have no chance ?
But what will the media narrative become ?
If it becomes "Labour need to win to show they're on course for government" then EdM's got problems.
It it becomes "Labour can't win but they're vote will collapse to let in UKIP" then EdM's got problems. Not specifically in Newark but generally if former Labour wwc voters get even further encouragement to vote UKIP.
I'm surprised Avery's apostrophe police hasn't spotted the error.
I was too fixated by the Nabavi being "elegant eloquently" rather than "elegantly eloquent" to notice, ar.
And TSE sinned on the their/there/they're decision last night. Too easy to do oneself to risk attack!
Interested to see Barbara Roche on Newsnight just. She typifies the metropolitan elite's hectoring moral superiority that so many of us find so off putting about the political establishment.
Roche represents nobody as her fruitless attempts to find a CLP desperate enough to adopt her as a candidate last time out proved. Why people like her (and even McShane who is constantly in the letters page of the FT) get any attention at all is beyond me.
"It still amazes me the importance attached to GDP these days... "
Huzzah! Someone else is posting about the nonsense of people getting excited about a figure not one person in a hundred understands, tells us nothing about national wealth and for most practical purposes is meaningless.
"... there is no mention of the Current Account deficit these days whatsoever..."
Richard Tyndall The formidable result he got in Newcastle under Lyme, a Labour area, suggests Jenrick is no party hack!
I might not know Newark, but I most certainly know N-U-L given I lived for 8 years in the constituency when growing up in Clayton, and my parents live virtually on its doorstep, just in Stone territory by literally 200 yards or so.
N-U-L has been moving in the Conservative's favour for the past 20 years or so - favourable demographics, decline of heavy industry / mining in Chesterton / Silverdale, so Jenrick's good result there in GE2010 was hardly unexpected. Its a shame the boundary changes didn't go ahead in this parliament as the proposed N-U-L and Stone constituency would have been an absolute corker of a marginal.
And I do know Newark. The previous two Conservative MPs have both been very independent minded and not afraid to vote against their own party even on the most important of issues. So far what I have seen of Jenrick does not indicate that is his nature though I would be very pleased to be proved wrong.
So does anyone disagree that Labour have no chance ?
But what will the media narrative become ?
If it becomes "Labour need to win to show they're on course for government" then EdM's got problems.
It it becomes "Labour can't win but they're vote will collapse to let in UKIP" then EdM's got problems. Not specifically in Newark but generally if former Labour wwc voters get even further encouragement to vote UKIP.
I'm surprised Avery's apostrophe police hasn't spotted the error.
I was too fixated by the Nabavi being "elegant eloquently" rather than "elegantly eloquent" to notice, ar.
And TSE sinned on the their/there/they're decision last night. Too easy to do oneself to risk attack!
Being 'elegant eloquently' is rather poetic I think.
Indeed its both elegantly poetic and eloquently poetic.
We can't have another Eurozone crisis until AEP declares the current one over...
More seriously, it's worth remembering that of the five PIIGS, Ireland is now able to borrow in the markets for less than the UK, and it's debt-to-GDP will soon begin to fall - perhaps as soon as next quarter. Spain and Italy are only a few basis points cheaper than the UK (yields on 10 years are 3.0% for Spain and Italy, and 2.8% for the UK, Ireland is 2.5%). Greece is still a basket case, but at least 75% of the debt is now owned by various international bodies (the IMF, the EU, etc.), so there will be an inevitable "extend and pretend", perhaps converting all publicly owned debt to 50 year maturities with a 2% yield. (This is equivalent to wiping off 60% of the debt, without actually admitting it.) Portugal is also improving. Furthermore, Draghi is now 'allowed' to use QE, so the ability of the European authorities to avoid a debt crisis is improving.
...
I tend to agree with your caution on the US stock market: not because there are problems with the US economy, but simply that stocks are expensive there right now, and earnings growth has been driven by corporates taking on increasing piles of debt to buy back their own shares. Considering how recently the credit crisis was, I find this debt accumulation concerning, and it certainly means US companies are more levered (positively and negatively).
All the cheap eurozone borrowing currently is another sign of a top, things always look best at a top, take late 2007 and Spring 2000 as prior prima facie examples in the past 15 years. Sentiment is so elevated that people feel inclined to lend to Greece at less than 5% yield for 10 years. If that's not a sign of ultimate trust in Draghi and the OMT then I don't know what is! A lot of the props behind the market rally are now coming apart - QE in the US is declining, the demographics in US and Europe are like Japan in 1990 and exerting even more deflationary pressure dead ahead. Yes the central banks have offset the deflationary pressure with the most wildly expansionary monetary policy in history. But with deflationary pressures strengthening further, we're finally reaching the tipping point, much later than I expected granted.
Central planning always ends in disaster, whether it be tractors, bread or money. Nobody should be under any illusions that this will all end disastrously. Bubbles always look best at the top, and the left hand side is always a good ride. Its the right hand side that always causes all the problems......but all the damage of depleting scarce capital has already been done, and one reason I will not vote Conservative in the forseeable future is Help to Buy (HTB) - government sponsored misallocation of capital. Libertarian Austrian School Economists like me are repulsed by such idiocy from this coalition government.
In 2010 Jenrick came within 1600 votes off overturning an 8800 majority in Newcastle under Lyme. He seems a fairly formidable campaigner.
Does anyone know what his position on Europe/immigration is? His website seems to be down for revision.
I cannot see UKIP beating him, whoever they pick.
...
Richard
Why not put yourself forward as UKIP's candidate for Newark?
My only worry in making this suggestion is that Farage may not be a supportive of your independent thinking as your potential constituents!
A serious question and suggestion though.
A few reasons I would not consider it.
Firstly as you say I would not be able to support a considerable part of the UKIP agenda. I am a fairly strong opponent of all parties and primarily support UKIP because of their EU policy. I like some other aspects of their policies but could not support their socially conservative stance.
Secondly and most importantly on a personal level I could not afford it. I earn too much and spend too much to be an MP if I was going to do it fairly and squarely with no outside interests or extra income - which is the only way I would ever consider it.
Thirdly there is my total lack of respect for politicians. I was asked on a couple of occasions by Patrick Mercer to put my name forward to be a Tory local councillor in Newark and always refused quite openly on the grounds that I neither trust or like politicians and would not want to be one.
Finally I am not sure my past would stand up to the sort of scrutiny that comes with the territory.Nothing major that would get me into real trouble but probably enough to embarrass my family.
It is a bit of a cop out I suppose to simply sit on the sidelines and snipe and I would be quite willing to help out with ideas if I thought the front man deserved support but I could not be that front man.
Richard
Many thanks for the ruthlessly (in its true sense) honest answer.
I can empathise with most of the reasons you put forward.
Still, in the unlikely event of Newark turning purple, I doubt it will be because of a better candidate.
All the cheap eurozone borrowing currently is another sign of a top, things always look best at a top, take late 2007 and Spring 2000 as prior prima facie examples in the past 15 years. Sentiment is so elevated that people feel inclined to lend to Greece at less than 5% yield for 10 years. If that's not a sign of ultimate trust in Draghi and the OMT then I don't know what is! A lot of the props behind the market rally are now coming apart - QE in the US is declining, the demographics in US and Europe are like Japan in 1990 and exerting even more deflationary pressure dead ahead. Yes the central banks have offset the deflationary pressure with the most wildly expansionary monetary policy in history. But with deflationary pressures strengthening further, we're finally reaching the tipping point, much later than I expected granted.
Central planning always ends in disaster, whether it be tractors, bread or money. Nobody should be under any illusions that this will all end disastrously. Bubbles always look best at the top, and the left hand side is always a good ride. Its the right hand side that always causes all the problems......but all the damage of depleting scarce capital has already been done, and one reason I will not vote Conservative in the forseeable future is Help to Buy (HTB) - government sponsored misallocation of capital. Libertarian Austrian School Economists like me are repulsed by such idiocy from this coalition government.
While I wouldn't be lending money to the Italians or Spaniards at 3%, the decline hasn't simply been the consequence of QE and the OMT. I think it's easy to miss the very real progress the Eurozone countries have made at cutting government expenditure. In 2007, Spain's government spending was 47.3% of GDP. It's 41.1% now. In Germany, it's declined from 48.8% to 43.7%. In Portugal from 54.1% to 46.1%. And in Italy from 55.3% to 48.8%. Only France - where government spending is 56.1% of GDP - looks ugly. (The US, of course, has moved in the other direction. Government spending rose from 35.3% to 38.9%.)
Do you read Grant's? I'm a big fan, and I tend to agree that mispricing money (the consequence of QE) causes serious distortions across the economy. And will, as you say, come back to bite us.
Fox Exactly, though Jenrick would clearly love to take the prize trophy of Farage
Hunchman Maybe, but it is all about momentum and a Tory triumph in Newark would fell Farage and Miliband in one blow and send Dave off on his hols with a spring in his step
Do you think there will be a tipping point. When Tory members start defecting on mass to UKIP?
You're behind the times. The claim now is that it is Labour which has most to fear from UKIP.
And why not? Farage is a better snake-oil salesman than Miliband, so it's logical enough that those who want to be sold snake-oil should transfer their allegiance.
Ironic from someone addicted to the Cameron brand of snake oil.
Yes, the brand which makes it absolutely clear that there are no quick fixes, that we need to get the deficit, welfare, and education back on track and that this will take years, that has achieved the best recovery from the worst position in the G7, that doesn't pretend everything is either the fault of the EU or nothing to do with the EU, that recognises the world and attitudes have changed in the last thirty years, and which above all is delivering what it said on the tin, both in terms of the party leadership (modernisation of the party, which is what he was elected to do), and putting Britain back on track after the blunders of the Labour years.
That you are rather more elegant eloquently than the other PBTs here doesn't mean you aren't addicted to the Cameron snake oil.
You seem to have forgotten to mention the UK's current account, productivity and home ownership trends among other things.
Perhaps you'd also explain how we can have a deficit when Cameron has been "paying down Britain's debts" ?
In reality the government gave up on the idea of getting Britain back on track when they decided to re-engineer another housing bubble - the quick fix of recreating the mindset of summer 2007.
But then Cameron, Osborne or indeed your own good self didn't notice anything wrong with the economy of summer 2007 did you.
The summer of ever rising house prices and is there honey still for tea ?
Well said. The deliberate confusion of the 'debt' and the 'deficit' is yet another reason why I can't stand Cameron and Osborne.
Both Hills' "Will UKIP win a By-Election before the next GE?" and Ladbrokes' "Will Farage stand as the UKIP candidate in the Newark By-Election? " markets appear to have been taken down. Will they re-appear in the morning and if so at what odds?
"Had dinner with Adam Boulton and the Sky News team tonight, as they prepare for election coverage of potential winning PPCs - all off the record so I won't quote anything, but an interesting session and illuminating about the leader debates."
Maybe you could point Adam Boulton in the direction of my candidates' list if you see him again. I don't think anyone else is doing one.
OK - I have an email for follow-ups. Remind me what it comprises exactly and how to contact you?
Both Hills' "Will UKIP win a By-Election before the next GE?" and Ladbrokes' "Will Farage stand as the UKIP candidate in the Newark By-Election? " markets appear to have been taken down. Will they re-appear in the morning and if so at what odds?
Surely the Farage one is too open for insider dealing?
Do you read Grant's? I'm a big fan, and I tend to agree that mispricing money (the consequence of QE) causes serious distortions across the economy. And will, as you say, come back to bite us.
I don't read Grant's - could you give me the source? I'd be interested to have a look.
As well as the GDP fascination, there is a fascination with government debt at the expense of total debt which includes personal debt, non-financial corporate debt and financial corporate debt. Debt in its totality is the problem - government debt as a % of GDP has been higher in the past, much higher than the current 75% on official figures....although I would counter that that excludes all the off balance sheet lending, pensions liabilities etc that any private sector company would need to include on its balance sheet. Government debt has been up to 250% of GDP in British history at times going back in the aftermath of expensive wars, but the difference back then was negligible corporate and personal debt, totally unlike today. If you look back in history, never has a country with a total debt to GDP ratio of around 500% (depending on how you measure it exactly) had a happy ending, it has always without fail ended in a spectacular credit deflation bust. Personal debt is barely unchanged from late 2007, official government debt is now roughly double what it was back then, and corporate debt is roughly similar too - true some corporates have record cash piles, but they've also taken advantage of cheaper borrowing rates in the markets to refinance their debts at lower rates.
As Austrian school economists know all too well, capital misallocation from mis-pricing of the price of money leads to catastrophic capital misallocation. If you look today at the ratio of intermediate capital goods to final consumer goods that ratio is even higher than it was in late 2007 and spring 2000 at prior 'bubble' tops. That speaks of an economy with an extended production structure, with the expectation that future demand in the economy will make good on those investments in productive capacity. Following the experience of spring 2000 and late 2007 I beg to differ. It speaks ill of an economy with massive capital resource misallocation, giving a false signal about the future profitability of such said investment. 5 years on and we still have a 'crisis' interest rate and QE. I don't recall being told in late 2008 / early 2009 by our central bank masters that we wouldn't have an exit plan 5 years on - remember that at the time?! Lets see where the economy would stand with a 'historic normalised' interest rate of 4 or 5% without QE shall we?!!! Artificially cheap money places the entire economy on quicksand, something that will be revealed to all in the great oncoming credit deflation.
Piers Corbyn? That old Trot! I also have an early flight on Saturday but I couldnt leave JohnO without a fellow PB Tory to sup cocktails with. Hope you enjoy Cyprus, it's one of my favourite places.
Thanks Neil. I am on Ms Nokes' patch these days, that's a bit of a trek to Dirty Dicks, much as I love discussing the general political scene with everyone!
'Tonight, though, we’ve seen the first public sign of unease in the SNP camp. At a debate organised by the Law Society in Scotland, Alyn Smith, SNP MEP, said that the SNP leadership should admit that they had made a mistake over an independent Scotland’s EU membership. They assert that they would be able to get in with the same terms as the rest of the UK, despite a growing pile of evidence to the contrary. There is little doubt that an independent Scotland would get EU membership at some point, but the terms and the speed at which it would happen are far from clear.
Smith told the astonished crowd that the SNP leadership had not listened to his advice that membership would not be as automatic as they had claimed.'
You have to read really carefully to find they are digging up stuff goes back as far as 10 years ago. I mean really, so there are some morons who work in the civil service and been trolling wikipedia, it isn't exactly MP / Minister changes own wikipedia page to exclude something truthful. I don't remember the BBC getting so upset about say Chuka Umunna activities.
Most people will just hear government, insults, especially the Muslim bashing stuff...I notice in the article they have dropped crucial details about some Hillsborough edits being back in 2008.
Totally off topic …… well maybe not as there might be betting potential in it ….. as some may recall there is a political crisis here in Thailand, due to the last election on Feb 2nd being declared null and void. Anyway the leader of the main opposition party has proposed a series of amendments to the Electoral Commission, including, according to English translations of local newspapers:
"Abhisit has proposed that the EC issue regulations to penalise politicians or parties who fail to deliver policies promised in their election campaign. For example, their electoral rights could be revoked if they failed to deliver, he said."
Basil and his friends, letting the Tory tree know what they think of the repeated 5% Labour leads. One for each percentage.........those goalposts just keep moving:
Ambrose Evans-Pritchard continues to be monumentally stupid.
"Spain falls 4.3pc this year, then starts to recover. The worst case is a 10.4pc drop over the next two years with rebound by 2016 even in a crisis. The Spanish regulators are delightfully optimistic as usual, seemingly living in a parallel universe."
In the last three years, Spanish banks have written of €340bn on bad loans, almost all property related. House prices have fallen by 45% in the Basque country and Catalonia, 50% in Madrid, and 60+% in the South of Spain. The Spanish regulators aren't being 'optimistic', they are merely reflecting that the Spanish housing market has already crashed. In addition, of the 48 Caixa that made the bulk of the bad loans, exactly two remain. The Spanish government was not 'optimistic', it closed down 46 banks.
"The EBA says Brits could see a 20pc drop by 2016. I fail to see how this could happen when there is a chronic housing shortage and when the central and all-consuming mission of the British government in the early 21st century is to prop up nominal house prices come what may, an objective that can always be met by a sovereign central bank, a printing press, and floating currency."
It's very simple Mr Evans-Pritchard, this is called capitalism. In a market economy there is a thing called 'price'. It is a combination of supply and demand. If people literally cannot afford more expensive houses, then they literally will choose to share properties, to live with their parents, or maybe even to live outside the UK. And immigrants from Poland or Romania or wherever, if they can't afford to live here, may choose not to come here. That doesn't mean the EBA analysis is correct, it merely reflects the fact that - on a price per square foot basis - property in London and the South is the among most expensive in Europe.
Mr AEP also misses a very important point: in the largest Eurozone economies, consumers simply aren't very indebted. In France, Germany and Italy, household debt-to-GDP is under 100% (roughly half the levels in the UK or the US). And while Spain and Ireland still have elevated household debt levels, those are the countries which have seen the most significant develereging in the last few years (in the latter's case at the cost of a horrendous recession and 27% unemployment). It's also worth noting that most of the European banks are pretty well capitalised now (tier ones are pretty much universally above 10%) and - excepting Deutsche Bank in Germany and SocGen in France - they don't rely on 'trading' or 'investment banking income' in the way that - say - Barclays does.
There is one good point in the piece, about inflation in the periphery. But other than that, Mr ARP, null points.
Comments
N-U-L has been moving in the Conservative's favour for the past 20 years or so - favourable demographics, decline of heavy industry / mining in Chesterton / Silverdale, so Jenrick's good result there in GE2010 was hardly unexpected. Its a shame the boundary changes didn't go ahead in this parliament as the proposed N-U-L and Stone constituency would have been an absolute corker of a marginal.
And TSE sinned on the their/there/they're decision last night. Too easy to do oneself to risk attack!
http://election-data.blogspot.co.uk/2014/04/the-constituency-of-newark.html
Very much on topic re Newark.
http://blogs.telegraph.co.uk/news/danhodges/100136841/luis-suarez-is-ruining-liverpools-reputation-and-kenny-dalglish-is-letting-him/
Huzzah! Someone else is posting about the nonsense of people getting excited about a figure not one person in a hundred understands, tells us nothing about national wealth and for most practical purposes is meaningless.
"... there is no mention of the Current Account deficit these days whatsoever..."
Now why should that be?
Indeed its both elegantly poetic and eloquently poetic.
Central planning always ends in disaster, whether it be tractors, bread or money. Nobody should be under any illusions that this will all end disastrously. Bubbles always look best at the top, and the left hand side is always a good ride. Its the right hand side that always causes all the problems......but all the damage of depleting scarce capital has already been done, and one reason I will not vote Conservative in the forseeable future is Help to Buy (HTB) - government sponsored misallocation of capital. Libertarian Austrian School Economists like me are repulsed by such idiocy from this coalition government.
Many thanks for the ruthlessly (in its true sense) honest answer.
I can empathise with most of the reasons you put forward.
Still, in the unlikely event of Newark turning purple, I doubt it will be because of a better candidate.
That's a keeper.
Tick, tock.
Do you read Grant's? I'm a big fan, and I tend to agree that mispricing money (the consequence of QE) causes serious distortions across the economy. And will, as you say, come back to bite us.
Hunchman Maybe, but it is all about momentum and a Tory triumph in Newark would fell Farage and Miliband in one blow and send Dave off on his hols with a spring in his step
As well as the GDP fascination, there is a fascination with government debt at the expense of total debt which includes personal debt, non-financial corporate debt and financial corporate debt. Debt in its totality is the problem - government debt as a % of GDP has been higher in the past, much higher than the current 75% on official figures....although I would counter that that excludes all the off balance sheet lending, pensions liabilities etc that any private sector company would need to include on its balance sheet. Government debt has been up to 250% of GDP in British history at times going back in the aftermath of expensive wars, but the difference back then was negligible corporate and personal debt, totally unlike today. If you look back in history, never has a country with a total debt to GDP ratio of around 500% (depending on how you measure it exactly) had a happy ending, it has always without fail ended in a spectacular credit deflation bust. Personal debt is barely unchanged from late 2007, official government debt is now roughly double what it was back then, and corporate debt is roughly similar too - true some corporates have record cash piles, but they've also taken advantage of cheaper borrowing rates in the markets to refinance their debts at lower rates.
As Austrian school economists know all too well, capital misallocation from mis-pricing of the price of money leads to catastrophic capital misallocation. If you look today at the ratio of intermediate capital goods to final consumer goods that ratio is even higher than it was in late 2007 and spring 2000 at prior 'bubble' tops. That speaks of an economy with an extended production structure, with the expectation that future demand in the economy will make good on those investments in productive capacity. Following the experience of spring 2000 and late 2007 I beg to differ. It speaks ill of an economy with massive capital resource misallocation, giving a false signal about the future profitability of such said investment. 5 years on and we still have a 'crisis' interest rate and QE. I don't recall being told in late 2008 / early 2009 by our central bank masters that we wouldn't have an exit plan 5 years on - remember that at the time?! Lets see where the economy would stand with a 'historic normalised' interest rate of 4 or 5% without QE shall we?!!! Artificially cheap money places the entire economy on quicksand, something that will be revealed to all in the great oncoming credit deflation.
Good night all.
There is a MERS (Middle Eastern Respiratory Syndrome) outbreak in Saudi Arabia. It's similar to SARS.
It appears to have made the species jump to us from dromedaries - just dromedaries, not Bactrians.
'Tonight, though, we’ve seen the first public sign of unease in the SNP camp. At a debate organised by the Law Society in Scotland, Alyn Smith, SNP MEP, said that the SNP leadership should admit that they had made a mistake over an independent Scotland’s EU membership. They assert that they would be able to get in with the same terms as the rest of the UK, despite a growing pile of evidence to the contrary. There is little doubt that an independent Scotland would get EU membership at some point, but the terms and the speed at which it would happen are far from clear.
Smith told the astonished crowd that the SNP leadership had not listened to his advice that membership would not be as automatic as they had claimed.'
The charity that represents Wikipedia in the UK has condemned edits made from government computers after more insults and vandalism emerged.
http://www.bbc.co.uk/news/technology-27203371
You have to read really carefully to find they are digging up stuff goes back as far as 10 years ago. I mean really, so there are some morons who work in the civil service and been trolling wikipedia, it isn't exactly MP / Minister changes own wikipedia page to exclude something truthful. I don't remember the BBC getting so upset about say Chuka Umunna activities.
Most people will just hear government, insults, especially the Muslim bashing stuff...I notice in the article they have dropped crucial details about some Hillsborough edits being back in 2008.
"Abhisit has proposed that the EC issue regulations to penalise politicians or parties who fail to deliver policies promised in their election campaign. For example, their electoral rights could be revoked if they failed to deliver, he said."
Wowee!!!!!!!!!
http://www.twigglemagazine.com/November-activities/images/a_felt5squirrels_large.jpg
SHOW ME THE CROSSOVER.......SHOW ME THE CROSSOVER!!!!
Ambrose Evans-Pritchard continues to be monumentally stupid.
"Spain falls 4.3pc this year, then starts to recover. The worst case is a 10.4pc drop over the next two years with rebound by 2016 even in a crisis. The Spanish regulators are delightfully optimistic as usual, seemingly living in a parallel universe."
In the last three years, Spanish banks have written of €340bn on bad loans, almost all property related. House prices have fallen by 45% in the Basque country and Catalonia, 50% in Madrid, and 60+% in the South of Spain. The Spanish regulators aren't being 'optimistic', they are merely reflecting that the Spanish housing market has already crashed. In addition, of the 48 Caixa that made the bulk of the bad loans, exactly two remain. The Spanish government was not 'optimistic', it closed down 46 banks.
"The EBA says Brits could see a 20pc drop by 2016. I fail to see how this could happen when there is a chronic housing shortage and when the central and all-consuming mission of the British government in the early 21st century is to prop up nominal house prices come what may, an objective that can always be met by a sovereign central bank, a printing press, and floating currency."
It's very simple Mr Evans-Pritchard, this is called capitalism. In a market economy there is a thing called 'price'. It is a combination of supply and demand. If people literally cannot afford more expensive houses, then they literally will choose to share properties, to live with their parents, or maybe even to live outside the UK. And immigrants from Poland or Romania or wherever, if they can't afford to live here, may choose not to come here. That doesn't mean the EBA analysis is correct, it merely reflects the fact that - on a price per square foot basis - property in London and the South is the among most expensive in Europe.
Mr AEP also misses a very important point: in the largest Eurozone economies, consumers simply aren't very indebted. In France, Germany and Italy, household debt-to-GDP is under 100% (roughly half the levels in the UK or the US). And while Spain and Ireland still have elevated household debt levels, those are the countries which have seen the most significant develereging in the last few years (in the latter's case at the cost of a horrendous recession and 27% unemployment). It's also worth noting that most of the European banks are pretty well capitalised now (tier ones are pretty much universally above 10%) and - excepting Deutsche Bank in Germany and SocGen in France - they don't rely on 'trading' or 'investment banking income' in the way that - say - Barclays does.
There is one good point in the piece, about inflation in the periphery. But other than that, Mr ARP, null points.